Pre-Qualified

You’d be surprise how many people confuse the meanings of “pre-qualified” and “pre-approved”. When submitting a loan application, individuals become so consumed with paperwork that they forget that there is a “process” that goes along with it. The process of being accepted by the bank or financial agency can be a strenuous one. Once the bank accepts your application, however, the time to secure the loan is still time consuming but at least your mind can rest knowing that you have finally been approved. Now, what you need to know first and foremost is the defference between qualification and approval. When you trying to secure a home mortgage loan, for instance, to be “pre-qualified” means that the mortgage company believes you are a good candidate based on the financial information you’ve provided to them. To be “pre-approved” (which is the next step in the process) means that the lender has checked your credit history and calculated your assets/liabilities, and based on that they can offer you a loan. The loan amount you receive will be determined by the lender. The interest rate you receive will also be selected by the lender. But remember…anything can happen at closing. A final appraisal of your credit, outstanding debt, and other last minute verifications must be in good standing before you sign on the dotted line and keys to your new home are handed over.